Automation May Prove Fatal Blow to Service Industry Workers

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Embattled Service Employees Facing Expanding Threat from Automation

Retail stores have folded across the country, with thousands of employees losing their jobs, but the true threat to service industry workers may have yet to arrive as automation could decimate jobs in the near future.

Usually automation is associated with overtaking jobs in goods-producing industries like manufacturing, but that is quickly changing. In 2016, three-quarters of the jobs lost among more than 350 sectors of the private economy were in services. While many of these jobs losses are not necessarily related to automation, it does show that the current trend is moving towards a shrinking service sector.

Automation, meanwhile, is most threatening to service workers, according to the Bureau of Labor Statistics, with thousands of workers vulnerable to being replaced by robots.

And the stakes are higher in the service industry versus sectors like coal. While the current White House administration has spent a lot of time discussing the revitalization of the coal industry and the return of goods-producing jobs, department stores alone employ 25-times more workers than coal companies. And that makes the cuts in the industry even more damaging.

For instance, in the first four months of 2017, 26,800 fewer people were employed in department stores versus the same period the year before. By contrast, coal only registered about 2,800 job losses, out of a total of around 50,600 workers. Department stores employ 1.28 million.

While the service industry is likely to bear the brunt of the damage of automation in the near future, many believe that the near future will bring large job reductions from technology across the board.

Researchers at the University of Oxford estimate that nearly half of all U.S. jobs may be at risk due to automation in the coming decades, while lower-paid workers are among the most vulnerable.

While some jobs are more resilient than others against the robot takeover—like teachers and surgeons—ultimately the threat of automation may spread far and wide, affecting the entire economy. Of course, we’ve already seen the turmoil tech caused in the auto industry, wiping out thousands of well-paying jobs, with many believing that automated trucking may have a similar impact in terms of workers being replaced by robots.

Sources

Is Your Job About To Disappear?: QuickTake,” Bloomberg, June 22, 2017.

The future of employment: How susceptible are jobs to computerisation?,” The Oxford Martin School at the University of Oxford, September 17, 2013.

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